The long term disability plan for eligible CUPE 116 members is called the Disability Benefit Plan (DBP). This is a mandatory, employee-paid plan that provides a monthly income after a six month waiting period for those who meet the definition of total disability under the plan. This plan is administered by Sun Life, with oversight from your union (CUPE 116) and UBC. Premiums for this plan are deducted from each of your pay cheques.

Some recent changes to the DBP will affect the premiums you pay, as well as the definition of disability. These changes are summarized below.

[1] Premium Holiday

The CUPE 116 DBP was recently changed from a “self-insured” plan to “fully-insured” (effective January 1, 2013). The primary reason for making this change was to reduce risk to plan members.

As a result of winding up the self-insured plan, there are surplus funds remaining. To complete the wind-up, these surplus funds will be paid out by way of a “premium holiday” for CUPE 116 employees who are enrolled in the DBP. This means that you will still have coverage under the DBP plan during this period, but you will not be required to pay premiums. Instead, your premiums will be paid from the surplus funds.

After this time your premium deductions will continue as usual (resuming on May 15, 2015, for monthly employees and on May 23, 2015, for hourly employees)1.

As an example of what this means, an employee who earn $45,000 per year will save $416.62 over the course of the 5.5-month premium holiday period.

[2] New Disability Benefit Plan (DBP) Premium Rate for 2015

Each year the premium rate for the DBP is established with the insurance company, Sun Life. The premium rate is influenced by a number of factors, with the most important one being claims experience – the number of claims and the expected cost of those claims into the future.

In 2015 your DBP premium rate will decrease to 1.915% of your earnings (the 2014 rate is 2.30%). This rate will be effective for the year, commencing January 1, 2015.

This new premium rate will be reflected on your pay after the premium holiday ends (May 15, 2015, pay for monthly employees and May 23, 2015, for hourly employees).

A CUPE 116 DBP Governance Committee will continue to regularly review the disability plan to ensure that it meets the needs of members and remains financially competitive.

[3] Plan Changes – Definition of Disability

The definition of disability within the DBP will change from “any occupation” to “2 year own occupation,” effective January 1, 2015. This is a plan improvement, and is explained below.

“Any Occupation” (currently in place). This has been in place up until now. It means that a claimant will be considered disabled, and therefore eligible for benefits, when they are unable to perform any occupation for which they are qualified for, or may become qualified for with some education, training, or experience (there are commensurate earnings requirements as well). In other words, you might not be able to do your own job due to your injury or illness, but if you can do other jobs, then you may not be eligible for DBP benefits.

“2 Year Own Occupation” (new starting in 2015). Starting in 2015 a claimant will be considered disabled, and therefore eligible for benefits, when they are unable to perform the essential duties of their own occupation during the 6-month elimination period and the following 24 months. After this 2-year period the definition switches from “own occupation” to “any occupation”. Essentially, this is less restrictive.

This new definition will apply to employees who are actively at work and become totally disabled on or after January 1, 2015. The old definition will continue to apply to those who are not actively at work, or who are on an unpaid leave of absence or disability claim.

1 Employees who are on a leave of absence and who maintained their DBP coverage will receive a refund for any premiums paid during the premium holiday. Refunds will only be issued after the premium holiday ends. The premium holiday does not apply to retroactive or off-cycle pay earnings.